Technologies

Does Next Week’s Fed Meeting Matter for Mortgage Rates? Yes and No

Homebuyers are still waiting on lower mortgage rates as the Fed looks to push off interest rate cuts.

If you followed the Federal Reserve’s monetary policy decisions last year, you might have been puzzled: The Fed’s three interest rate cuts didn’t translate into cheaper mortgages. In fact, the average rate for a 30-year fixed home loan has hovered around 6.8% since late fall.

On Wednesday, the central bank is expected to extend a pause on interest rate cuts for a fourth consecutive time this year. Though mortgage rates could see some volatility, many economists expect them to stay somewhat flat until there’s a drastic change in the economic picture.

Rates will stay in the 6.75% to 7.25% range unless the Fed signals multiple cuts soon and backs it up with data, said Nicole Rueth, of the Rueth Team with Movement Mortgage. «Homebuyers waiting on rates to drop drastically might be disappointed,» Rueth said.

The relationship between the Fed’s interest rate decisions and home loan rates isn’t direct or immediate. Often, what the central bank says about future plans can move the market more than its actual actions. Mortgage rates are driven by the bond market, investor expectations and a host of other economic factors.

«Mortgage rates move on expectations, not announcements,» said Rueth.

All eyes will be on Fed Chair Jerome Powell’s post-meeting remarks. If Powell signals concerns about lingering inflation or the chance of fewer cuts, bond yields and mortgage rates are likely to climb. If he expresses optimism about inflation being under control and hints at ongoing policy easing, mortgage rates could dip.

«It’s most often the case that longer-term interest rates begin to decline before the Fed cuts rates,» said Keith Gumbinger, vice president at HSH.com.

Here’s what you need to know about how the government’s interest rate policy influences your home loan.

What is the Federal Reserve’s relationship to mortgage rates?

The Fed sets and oversees US monetary policy under a dual mandate to maintain price stability and maximum employment. It does this largely by adjusting the federal funds rate, the rate at which banks borrow and lend their money.

When the economy weakens and unemployment rises, the Fed lowers interest rates to encourage spending and propel growth, as it did during the COVID-19 pandemic.

It does the opposite when inflation is high. For example, the Fed raised its benchmark interest rate by more than five percentage points between early 2022 and mid-2023 to slow price growth by curbing consumer borrowing and spending.

Changes in the cost of borrowing set off a slow chain reaction that eventually affects mortgage rates and the housing market, as banks pass along the Fed’s rate hikes or cuts to consumers through longer-term loans, including home loans.

Yet, because mortgage rates respond to several economic factors, it’s not uncommon for the federal funds rate and mortgage rates to move in different directions for some time.

Why is the Fed postponing interest rate cuts?

After making three interest rate cuts in 2024, the Fed is now in a holding pattern. With President Donald Trump’s unpredictable tariff campaign, immigration policies and federal cutbacks threatening to drive up prices and drag on growth, economists say the central bank has good reason to pause.

«The Federal Reserve is in one of the trickiest spots in recent economic history,» said Ali Wolf, Zonda and NewHomeSource chief economist.

Lowering interest rates could allow inflation to surge, which is bad for mortgage rates. Keeping rates high, however, increases the risk of a job-loss recession that would cause widespread financial hardship.

Recent data show inflation making slow but steady progress toward the Fed’s annual target rate of 2%. But given the uncertainty surrounding Trump’s economic agenda, the central bank isn’t in a hurry to lower borrowing rates.

What is the forecast for Fed cuts and mortgage rates in 2025?

While experts now predict an interest rate cut in the fall, Powell remains noncommittal on any specific time frame.

«I’m eyeing September for the first rate cut, if inflation keeps cooling and the labor market weakens,» Rueth said.

However, tariffs are the big wildcard. Rueth said that if a trade war fuels inflation, rates could jump even without a Fed move. Political dysfunction, rising debt and global instability are also a recipe for rate volatility.

«The mortgage market reacts fast to uncertainty, and we’ve got no shortage of it this summer,» Rueth said.

On the flip side, if unemployment spikes — a real possibility given rising jobless claims — the Fed could be forced to implement interest rate cuts earlier than anticipated. In that case, mortgage rates should gradually ease, though not dramatically.

Most housing market forecasts, which already factor in at least two 0.25% Fed cuts, call for 30-year mortgage rates to stay above 6% throughout 2025.

«We might see rates settle into the low to mid-6% by year-end,» Rueth said. «But we’re not going back to 3%.»

What other factors affect mortgage rates?

Mortgage rates move around for many of the same reasons home prices do: supply, demand, inflation and even the employment rate.

Personal factors, such as a homebuyer’s credit score, down payment and home loan amount, also determine one’s individual mortgage rate. Different loan types and terms also have varying interest rates.

Policy changes: When the Fed adjusts the federal funds rate, it affects many aspects of the economy, including mortgage rates. The federal funds rate affects how much it costs banks to borrow money, which in turn affects what banks charge consumers to make a profit.

Inflation: Generally, when inflation is high, mortgage rates tend to be high. Because inflation chips away at purchasing power, lenders set higher interest rates on loans to make up for that loss and ensure a profit.

Supply and demand: When demand for mortgages is high, lenders tend to raise interest rates. This is because they have only so much capital to lend in the form of home loans. Conversely, when demand for mortgages is low, lenders tend to slash interest rates to attract borrowers.

Bond market activity: Mortgage lenders peg fixed interest rates, like fixed-rate mortgages, to bond rates. Mortgage bonds, also called mortgage-backed securities, are bundles of mortgages sold to investors and are closely tied to the 10-year Treasury. When bond interest rates are high, the bond has less value on the market where investors buy and sell securities, causing mortgage interest rates to go up.

Other key indicators: Employment patterns and other aspects of the economy that affect investor confidence and consumer spending and borrowing also influence mortgage rates. For instance, a strong jobs report and a robust economy could indicate greater demand for housing, which can put upward pressure on mortgage rates. When the economy slows and unemployment is high, mortgage rates tend to be lower.

Read more: Fact Check: Trump Doesn’t Have the Power to Force Lower Interest Rates

Is now a good time to get a mortgage?

Even though timing is everything in the mortgage market, you can’t control what the Fed does. «Forecasting interest rates is nearly impossible in today’s market,» said Wolf.

Regardless of the economy, the most important thing when shopping for a mortgage is to make sure you can comfortably afford your monthly payments.

More homebuying advice

Technologies

Homebuyers Are Scoring 5% Mortgage Rates With These Simple Strategies

You don’t have to settle for high rates in 2025. Here’s how to cut your mortgage rate by 1% or more.

If you’re looking to buy a home, you probably know that housing affordability is in the dumps. Record-high prices and high mortgage rates are serving a double whammy to prospective buyers everywhere.

But mortgage rates aren’t set in stone. Although current rates are hovering near 7%, more borrowers are finding creative ways to snag rates below what lenders advertise. Last year, nearly half of buyers purchased a home at a rate below 5%, according to Zillow.

«With borrowing costs elevated, buyers can take steps to reduce their housing expenses by securing a lower mortgage rate,» said Hannah Jones, senior research analyst at Realtor.com.

The market forces that influence mortgage rates are out of your control. However, if you’re financially prepared and shop around, you can save up to 1.5% on your personalized rate. Optimizing your credit score, making a larger down payment and negotiating with multiple lenders could also help you unlock homeownership in 2025.

Even a 1% difference in your rate can translate to about 10% savings on your monthly mortgage payment and tens of thousands of dollars in savings over the course of your loan.

Here are several ways to reduce your mortgage rate.

1. Improve your credit score

If your credit needs work, consider taking steps to raise your credit score before applying for a mortgage.

Lenders look at your credit score to decide whether you qualify for a home loan and what interest rate you receive. FICO credit scores range from 300 to 850, with 850 being the best score possible. Higher credit scores show you’ve managed debt responsibly in the past so it lowers your risk to a lender. This can help you secure a lower interest rate and save big.

«The best mortgage rates and products are typically reserved for those with a credit score of 740 or better,» said Sarah DeFlorio, vice president of mortgage banking at William Raveis Mortgage.

According to a 2024 Lending Tree study, when borrowers moved from the «fair» credit score range (580 to 669) to the «very good» range (740 to 799), they shaved 0.22% percentage points off their interest rate. That rate difference helped borrowers save $16,677 over the lifetime of a home loan.

2. Increase your down payment

Your down payment is the amount of money you contribute to your home purchase upfront. Each type of home loan comes with a minimum down payment, usually ranging from zero to 5%, but a higher down payment means a cheaper interest rate. That’s because the lender takes on less risk when you contribute more toward the loan.

Because a down payment lowers your mortgage rate and builds your home equity, home loan experts often recommend making a large down payment of at least 20%.

3. Take out an adjustable-rate mortgage

An adjustable-rate mortgage, or ARM, is a home loan with a fixed rate for a set introductory period, such as five years. Once that period ends, the interest rate can go up or down in regular intervals for the remaining term.

The big appeal of ARMs is that the introductory interest rate is often lower than the rate on traditional mortgages. In general, the average 5/1 ARM rate is about 0.5% lower for the first several years than the average rate for 30-year fixed-rate mortgages.

4. Negotiate your mortgage rate

When you’re applying for mortgage loans, you don’t have to go with the company that did your preapproval. In fact, research shows that getting rate quotes from multiple lenders and comparing offers can result in significant savings.

If you want to use this strategy, start by submitting a mortgage application with lenders that fit your criteria. Once you have a few loan estimates in hand, use the best one to negotiate with the lender you want to work with.

The loan officer may lower your rate, help you save on closing costs or offer other incentives to get you onboard. In a 2023 LendingTree survey, 39% of homebuyers negotiated the interest rate on their most recent home purchase. Out of that pool of buyers, 80% were able to get a better deal.

5. Choose a shorter home loan term

Nearly 90% of homebuyers choose a 30-year fixed mortgage term because it offers the most flexibility and monthly payment affordability. Payments are lower because they’re stretched over a longer timeline, but you can always put more toward the principal here and there.

But when you take out a longer-term home loan, «you’re holding up the lender’s money, and there’s an opportunity cost for the funds to be invested elsewhere,» said Nicole Rueth, SVP of the Rueth Team Powered by Movement Mortgage.

Shorter loan terms, such as 10-year and 15-year mortgages and ARMs, have lower interest rates, so you can reduce your rate now.

Choosing a shorter repayment term could help you save money because you’ll be paying less in interest over the long term. But don’t make the homebuying mistake of choosing a shorter loan term just for the lower rate. Shorter loan terms mean you’ll have less time to repay the money you borrow, resulting in higher monthly payments, so it’s important to ensure they fit within your budget.

6. Buy mortgage points

A mortgage point, also known as a mortgage discount point, is an upfront fee you can pay the lender in exchange for a lower interest rate on your home loan.

Each point costs 1% of the purchase price of a home and usually knocks the rate down by 0.25%. On a $400,000 home, you’d pay $4,000 for one discount point. The lender may even allow you to buy four mortgage points to lower the rate from 7% to 6%, although you’d have to shell out $16,000 to get there.

To check whether this strategy is worthwhile, take the total cost of the points and compare it to the overall monthly savings. In this case, when you pay $16,000 to buy four points and save $210 per month, it would take you more than six years to reach your break-even point.

Some experts encourage putting any extra money you have toward a down payment instead of buying points. That’s because if you sell the home or refinance before reaching your break-even point, you lose money. But the amount you spent on your down payment becomes part of your equity.

7. Get a temporary mortgage rate buydown

A temporary mortgage rate buydown involves paying a fee at closing to lower your interest rate for the first few years of your loan term. Because of the considerable upfront cost, this strategy only makes financial sense when someone else pays that fee. Home builders, sellers and even some lenders may offer to cover this type of buydown to boost sales, especially when market rates are elevated.

For example, a lender may offer a «3-2-1» buydown, where the interest rate is slashed by 3 percentage points in the first year, 2 percentage points in the second year and 1 percentage point in the third. Starting in the fourth year, you pay the full rate for the rest of the loan term.

Buyers often choose a temporary buydown and plan to refinance later on. Your buydown funds are refundable and you can use them toward closing costs when you refinance (if rates do drop).

What is a ‘good’ mortgage rate?

The majority of US adults would consider purchasing a home if rates were to drop to 4% or below. Yet most mortgage forecasts don’t project average rates dipping below 6.5% this year.

In a historical sense, a good mortgage rate is generally at or below the national average. Since 1971, the 30-year fixed mortgage rate has averaged 7.72%, according to Freddie Mac. In the last year, average mortgage rates have mostly fluctuated between 6% and 7%.

Affordability is relative to your overall financial situation. And because mortgage rates can change daily and even hourly, the definition of a «good» rate can change quickly.

«What matters is the rate you can get today,» said Colin Robertson, founder of The Truth About Mortgage. According to Robertson, the only way to know if you’re getting a good deal is to speak with a few different lenders and brokers and then compare their quotes against the daily or weekly averages.

Buying a home is a personal decision so it should feel right for your situation and budget. As you shop for a home, consider multiple strategies to lower your rate. A mortgage calculator can help you estimate what you’d pay each month.

Read more: Still Chasing 2% Mortgage Rates? Here’s Why It’s Time to Let Them Go

Technologies

Today’s NYT Mini Crossword Answers for Sunday, June 15

Here are the answers for The New York Times Mini Crossword for June 15.

Looking for the most recent Mini Crossword answer? Click here for today’s Mini Crossword hints, as well as our daily answers and hints for The New York Times Wordle, Strands, Connections and Connections: Sports Edition puzzles.

Need some help with today’s Mini Crossword? Read on. And if you could use some hints and guidance for daily solving, check out our Mini Crossword tips.

The Mini Crossword is just one of many games in the Times’ games collection. If you’re looking for today’s Wordle, Connections, Connections: Sports Edition and Strands answers, you can visit CNET’s NYT puzzle hints page.

Read more: Tips and Tricks for Solving The New York Times Mini Crossword

Let’s get to those Mini Crossword clues and answers.

Mini across clues and answers

1A clue: Long, drawn-out story
Answer: SAGA

5A clue: With 6-Down, become hopelessly infatuated
Answer: CRUSH

7A clue: Unsettled feeling
Answer: AGITA

8A clue: Back tooth
Answer: MOLAR

9A clue: Passionate student, perhaps
Answer: NERD

Mini down clues and answers

1D clue: A text saying «Congratulations! You’ve won a $1,000 gift card,» usually
Answer: SCAM

2D clue: Element between chlorine and potassium on the periodic table
Answer: ARGON

3D clue: Craftiness
Answer: GUILE

4D clue: «___ Is Born» (film)
Answer: ASTAR

6D clue: See 5-Across
Answer: HARD

Technologies

Today’s NYT Strands Hints, Answers and Help for June 15, #469

Here are hints and answers for NYT Strands puzzle No. 469 for June 15.

Looking for the most recent Strands answer? Click here for our daily Strands hints, as well as our daily answers and hints for The New York Times Mini Crossword, Wordle, Connections and Connections: Sports Edition puzzles.

Today’s NYT Strands puzzle celebrates Father’s Day, but in kind of an oddball way. If you need hints and answers, read on.

I go into depth about the rules for Strands in this story.

If you’re looking for today’s Wordle, Connections and Mini Crossword answers, you can visit CNET’s NYT puzzle hints page.

Read more: NYT Connections Turns 1: These Are the 5 Toughest Puzzles So Far

Hint for today’s Strands puzzle

Today’s Strands theme is: Here’s to him.

If that doesn’t help you, here’s a clue: Dad food.

Clue words to unlock in-game hints

Your goal is to find hidden words that fit the puzzle’s theme. If you’re stuck, find any words you can. Every time you find three words of four letters or more, Strands will reveal one of the theme words. These are the words I used to get those hints but any words of four or more letters that you find will work:

DRAW, WARD, PAIR, SPARE, PORE, PADS, CLAY, PLUS, FORE, SCORE, CORE, CRAW, CORN, PATH

Answers for today’s Strands puzzle

These are the answers that tie into the theme. The goal of the puzzle is to find them all, including the spangram, a theme word that reaches from one side of the puzzle to the other. When you have all of them (I originally thought there were always eight but learned that the number can vary), every letter on the board will be used. Here are the nonspangram answers: